You know how some games come with level editor? Sometimes, creative people use these editors to create what amounts to almost a whole new game, like the original DotA, which was a Warcraft 3 map. Now, imagine the editor gives you a whole buttload of freedom. You can add entire new models, scripts, even toy with the physics etc. And because your target audience are people trying to make their own game, that’s pretty much all you ship, with no base game to go along. That’s essentially an engine.
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